Shipping to the UK from Canada: Import Fees, VAT and Duty Guide

The United Kingdom remains a top market for Canadian companies. While trade is strengthened by the UK-Canada Trade Continuity Act (CUKTCA), there is a common misconception that "Free Trade" means "No Fees."

In reality, while the agreement may eliminate duty on Canadian-made goods, it does not eliminate Value Added Tax (VAT) or other import fees. All commercial consignments to the UK are subject to scrutiny by His Majesty's Revenue and Customs (HMRC).

Do I have to pay duty on items to the UK from Canada?

Generally, yes. However, there are two main factors that determine if you pay duty:

1. The Value Threshold: Consignments with a value over £135 (approx $230 CAD) are subject to duty. Under this amount, duty is often waived, but VAT still applies.
2. Origin of Goods: If your goods are made in Canada, they may qualify for duty-free entry under the CUKTCA, regardless of value.

Why are there still fees if my package is under £135?

The "De Minimis" duty-free threshold was eliminated for VAT. All imports to the UK are subject to the 20% VAT (Value Added Tax). For items under £135 sold online, the seller is often responsible for collecting this VAT at the point of sale. For items over £135, VAT is collected at the border.

Why do carriers charge an extra fee?

This is called a Disbursement Fee. When your package arrives, carriers (like FedEx, UPS, or DHL) pay the Duty and VAT to UK Customs immediately to release your goods. They then invoice you (or the receiver) for this amount plus an administrative fee for fronting the money. This fee is commonly 2.5% of the total duties/taxes paid, with a minimum charge (often £12-£17).

Examples: Calculating UK Import Fees

UK customs calculates fees based on the Assessment Value (Cost of goods + Shipping), the HS Code (Classification), and the Country of Origin.

How to benefit from the UK-Canada Free Trade Agreement

To get the savings shown in Scenario B, your goods must meet the Rules of Origin. Simply shipping from Canada is not enough; the goods must be manufactured or substantially transformed in Canada.

You must include a statement of origin on your commercial invoice. Download a sample declaration form here.

Checklist: Common Import Fees

• Customs Duty: Based on HS Code.
• VAT: 20% consumption tax.
• Excise Duty: For alcohol, tobacco, fuel.
• Disbursement Fee: Charged by the carrier.
• Inspection Fees: For food/plant products.
• Brokerage Fee: If using a third-party broker.

Read more about Customs Duty Calculation or Understanding VAT vs Duty.

Related Resources

Disclaimer: This post and all Jet Worldwide online content is for general information only. Always confirm compliance with the importer prior to shipping.